2025 PLMA Award Winner

TECH Clean California, the California Public Utilities Commission (CPUC)’s market transformation initiative for clean heating technologies, launched in December 2021 with a variety of market interventions. These initiatives included pilots and quick start grants, workforce education and training, public data reporting, and heat pump HVAC and heat pump water heater (HPWH) incentives.

The incentives are paid to enrolled contractors who then discount installations of clean heating technologies for residential customers throughout California. In 2022, the CPUC announced new requirements for an upcoming infusion of HPWH incentive funding, including the requirement for all customers receiving an incentivized HPWH to enroll in a market-integrated demand response program and a time-of-use (TOU) rate.

To-date, TECH Clean California has funded over 11,000 HPWH installations resulting in an estimated 9,600 metric tons CO2e/year of greenhouse gas savings. It was important to maintain momentum and high customer satisfaction as the program transformed into an integrated demand side management (IDSM) program with demand management requirements attached to technology incentives. A September 2023 customer satisfaction report by TECH Clean California’s independent evaluator, Opinion Dynamics, found that 91 percent of customers were very or somewhat satisfied with their HPWH.

TECH Clean California is a midstream incentive program, so the implementer does not have a direct touchpoint with the end use customers. Therefore, it was up to contractors to communicate the demand response and TOU rate enrollment requirements and address concerns. The TECH Clean California team facilitated TOU rate transfers behind the scenes with utilities after contractors gathered customers’ permission, ensuring a nearly 100 percent enrollment rate for over 5,000 customers who’ve participated since the launch of these requirements. However, since customers need to actively enroll in a demand response program, successful implementation of that new enrollment requirement hinged on contractors being educated, on-board, and capable of facilitating demand response enrollments without significantly compromising their core goal of selling and installing HPWHs. Since contractors were mostly unfamiliar with demand response, it was critical for the TECH Clean California implementation team, led by Energy Solutions, to educate and support contractors.

Additionally, since TECH Clean California HPWH incentives is a statewide program, the program team needed to assist contractors and customers in navigating the various demand response program options across the state based on the customer’s electric utility provider and based on the CPUC definition of a “qualifying” program.

In an effort to increase the program options available to participating HPWH customers, the program team worked with the CPUC to initiate a “ruling process,” complete with a public comment period, to update the definition of qualifying demand response programs. This resulted in expanded criteria for what counts as a qualifying program for participating HPWH customers, criteria which are now also used for other current and future CPUC technology incentive programs with demand response enrollment requirements.

Rewinding to when the CPUC announced the new upcoming demand response and TOU rate enrollment requirements, the TECH Clean California team was already proactively implementing a HPWH load shifting pilot which explored how to best leverage contractors to mitigate peak demand impacts from HPWH installations. The pilot launched a required training video on the concepts of demand response, TOU rates, HPWH load shifting, customer value propositions, and why it all matters for clean and reliable electrification. More than 300 contractors took the training and the required post-training survey. 95 percent of survey respondents indicated they planned to share the information from the training with their colleagues and/or employees, and more than two-thirds said that training would make them more likely to enroll their customers in demand response.

During this pilot period, and later on leading up to and through the initial implementation of the demand response enrollment requirement, which went live in October 2023, the TECH Clean California team consistently gathered contractor feedback (through surveys, focus groups, and one-on-one calls). With this feedback, the team developed key demand response resources including customer-facing sites and flyers, and contractor-facing webinars and support articles.

The program team found later, through survey efforts, that demand response program support efforts had been positively received by contractors. Fifty-six contractors responded to an August 2024 survey about TECH Clean California’s demand response requirement. When asked about the utility of various program resources, 83 percent of contractors chose “very,” “moderately,” or “somewhat” useful on average across the resources (the other options being “a little” and “not at all”). One-on-one discussions were rated as the most helpful program resource, with 92 percent of respondents who’d utilized that resource choosing at least somewhat useful. When asked about confidence with demand response, 75 percent of contractors responded that they were at least somewhat comfortable explaining demand response to their customers, with 37 percent extremely or very comfortable.

The TECH Clean California team balanced the goals of high enrollment rates and continued contractor engagement with the HPWH incentive program by taking a phased approach to enforcing the new demand response requirement. Initially, TECH Clean California paid contractors after they completed an installation, verifying customer enrollment status on the backend with demand response program providers. Early data indicated that roughly one third of customers were enrolling. The program team then had one-on-one conversations about the demand response enrollment requirement with over 40 contractors to reinforce expectations, understand and clarify key points of confusion, provide coaching and troubleshooting for difficulties that contractors were facing, and gather contractor recommendations for success.

The team shared the idea of introducing a requirement to upload proof of demand response enrollment (for example, an enrollment confirmation email or screenshot from an account profile) when submitting the application for incentive payment. After their concerns had been addressed, most contractors shared that complying with this additional enforcement mechanism would be feasible, and several contractors shared that this “stepping stones” approach to enforcement was necessary for contractor success with the program.

The “proof of demand response enrollment” requirement launched in December 2024 together with a relaunch of HPWH incentive funding. Within the first seven weeks, contractors had submitted nearly 600 completed incentive submissions — a volume that is consistent with participation levels prior to the proof of enrollment requirement. This early data indicates that the TECH Clean California team has successfully ratcheted up program requirements in a way that has supported contractors’ evolution into demand response leaders, keeping HPWH installations volumes strong, and achieving successful demand response enrollment for a majority of customers!